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The United States Securities and Exchange Commission (SEC) is currently disseminating information to assist cryptocurrency victims impacted by the collapse of Do Kwon’s Terraform Labs in filing compensation claims.
As stated in a post on the SEC’s website, the revised guidance is filled with “information designed to help address those inquiries and contact details for questions regarding the distribution process, which will be managed through Terraform’s bankruptcy proceedings.”
SEC Offers Updated Information on Terraform Labs Compensation Claims
The informative legal guidance comes as investors reach out to the federal agency regarding “their capacity to obtain compensation in light of the outcome of the Commission’s action against Terraform” in June of this year.
As part of its settlement with the SEC concerning its civil fraud case linked to its significant algorithmic stablecoin failure a few years ago, Terraform Labs has consented to pay nearly $4.5 billion.
NEW: The SEC has released a notice to investors affected by the downfall of Do Kwon’s Terraform Labs. According to the notice, Kwon is obligated to transfer at least $204,320,196 to the Terraform bankruptcy estate for distribution among impacted investors. pic.twitter.com/81E0urhzqO
— Giannis Andreou (@gandreou007) July 30, 2024
Attorneys for the SEC contended that the established financial judgment would “send a clear deterrent message not only to those who engage in blatant misconduct but also to all who attempt to circumvent federal securities laws by creating new standards of conduct for crypto assets.”
While U.S. attorneys initially sought a penalty of $5.3 billion against the firm, Terraform Labs proposed a mere $1 million in fines.
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As part of the settlement, Terraform Labs founder Do Kwon will be required to pay over $200,000 personally.
Do Kwon Faces Legal Challenges Over TerraLuna Collapse, Extradition Issues
In April, both the now-defunct cryptocurrency exchange and Kwon were deemed liable for the cryptocurrency collapse that wiped out an estimated $40 billion from digital asset markets.
Kwon fled his home country of South Korea shortly after his crypto firm’s failure, leading to a months-long manhunt for the alleged crypto tycoon across various regions in Europe, Asia, and the Middle East before he was eventually apprehended in Montenegro for document forgery.
Although his time in a Montenegrin prison has concluded, Kwon will remain incarcerated until a final determination is made regarding his extradition to face criminal charges related to the crypto fraud scheme.
Both the United States and South Korea are currently vying for his extradition. However, the Terraform Labs founder is reportedly seeking to return to his home country, where he may face lesser criminal penalties.
Nonetheless, it remains uncertain what criminal charges the crypto fraudster will encounter in the future.
The post SEC Shares Compensation Claim Info For Terraform Fraud Victims appeared first on Cryptonews.
